News Release

Department Announces New Beginning Farmer Benefits, Other Changes to Crop Insurance that Provide Flexibility to Farmers

WASHINGTON, June 30, 2014 – Agriculture Secretary Tom Vilsack today announced continued progress in implementing provisions of the 2014 Farm Bill that provide new risk management options for farmers and ranchers. These improvements to crop insurance programs will provide better protection from weather disaster, market volatility and other risk factors to ensure farmers aren't wiped out by events beyond their control.

Vilsack also announced new support for beginning farmers that will make crop insurance more affordable and provide greater support when new farmers experience substantial losses. These announcements build on other recent USDA efforts to support beginning farmers.

"Crop insurance is critical to the ongoing success of today's farmers and ranchers and our agriculture economy. These improvements provide additional flexibility to ensure families do not lose everything due to events beyond their control," said Vilsack. "We're also acting to provide more support to beginning farmers and ranchers so that they can manage their risk effectively. We need to not only encourage new farmers to get into agriculture, we must ensure they're not wiped out in their riskiest initial seasons so they can remain in agriculture for years to come."

The U. S. Department of Agriculture's (USDA) Risk Management Agency (RMA) filed an interim rule with the Federal Register today, allowing USDA to move forward with changes to crop insurance provisions. The provisions provide better options for beginning farmers, allow producers to have enterprise units for irrigated and non-irrigated crops, give farmers and ranchers the ability to purchase different levels of coverage for a variety of irrigation practices, provide guidance on conservation compliance, implement protections for native sod and provide adjustments to historical yields following significant disasters.

The Farm Bill authorizes specific coverage benefits for beginning farmers and ranchers starting with the 2015 crop year. The changes announced today exempt new farmers from paying the $300 administrative fee for catastrophic policies. New farmers' premium support rates will also increase ten percentage points during their first five years of farming. Beginning farmers will also receive a greater yield adjustment when yields are below 60 percent of the applicable transitional yield. These incentives will be available for most insurance plans in the 2015 crop year and all plans by 2016.

Starting in the fall of 2014, producers who till native sod and plant an annual crop on that land will see reductions in their crop insurance benefits during the first four years. Native sod is acreage that has never been tilled, or land which a producer cannot substantiate has ever been tilled for the production of a crop. The provision applies to acreage in all counties in Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota that is greater than five acres per policy and is producing annual crops.

Additional flexibility for irrigated and non-irrigated enterprise units and coverage levels will be available in the spring of 2015. Additional information on implementation of these changes is available at the RMA website, www.rma.usda.gov.

More information is available on the RMA website at www.rma.usda.gov. Written comments on the rule can be submitted to www.regulations.gov by Sept. 2, 2014. All comments will be considered when the rule is made final.

Today's announcement was made possible by the 2014 Farm Bill. The Farm Bill builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.

Since the signing of the Farm Bill, RMA has been working to implement the provisions as quickly as possible. The Federal Crop Insurance Board approved RMA's Whole-Farm Revenue Insurance policy in May. RMA will finalize the policy materials and expects to release the Whole-Farm Revenue Protection product to the public in late fall.